Examples Of Money Laundering

Money laundering is the process of taking illegally obtained, or “dirty” money and finding ways and means to make it legitimate or clean.

Since such dirty money cannot be spent, it is necessary to launder or whitewash that money before you can make any use of it, like invest it, or put it in a bank etc. While money laundering has usually been the department of large criminal organizations, there are several examples of money laundering involving individuals as well.

In such a situation, the amount of money that needs to be laundered is usually small, and if it is in cash, it can slowly be introduced spent for your daily expenses rather than using your pay check money, thereby increasing your savings. You end up paying tax on the amount, and hence the money is clean.

Another very common example of money laundering when it comes to larger sums of money is to start a small business, where your income is usually in cash, and there is no clear way of keeping tabs on your income via this business. You can start a car wash, barber shop etc. (where you are paid in cash) and slowly add your dirty money to this, pay tax on it, and get away safely.

More complex methods for huge sums of money involve creating offshore accounts, setting up false shell companies, or false businesses, usually in the import export department, and using this as an excuse to funnel your cash into a legitimate bank account. There is no easy way as such for money laundering. The main reason for this is that money laundering is illegal and a very serious charge, and must always be avoided.

Money laundering is the process of converting dirty money, that is money which arises from illegal means such as drug trafficking or prostitution or tax evasion, or even from highly placed members in large corporations diverting money to their personal accounts, into clean money by using a number of different methods, the most common of which is by using banks, insurance companies and other financial institutions, or by setting up businesses and companies and pump the money there instead. More..